Freight markets look for direction

Freight markets look for direction
25 May 2005

With the freight market still on a downward trend the news this week mainly focused on commodities. First on Wednesday the IISI published its monthly report on world crude steel production, confirming again (if necessary) the leading position of Asian countries for steel output growth with a 16.8 per cent gain compared to April 2004 (25.4 per cent for China alone). World crude steel production in April reached 92.1Mt which is eight per cent higher than 12 months ago. There is also some turmoil on the grain front, but this time which could turn in favour of European exporters as Russia expects a 12 per cent cut in its 2005 crop to 66-70Mt and Brazil may have to import at least 2Mt of GM free corn for its booming livestock industry this year and a bad crop due to dryness.









The Panamax market was undecided last week in both basins. There was an increase in enquiry in the Far East but the rates did not follow. Richards Bay seemed very active but there were a lot of ships chasing few cargoes which produced cheaper fixtures. Atlantic rates remained flat. The spot market is looking for direction but sentiment is flat. Period values reduced significantly although very little actually fixed which seems to suggest that their is further downward potential before charterers willing to start taking in again. Many owners discounting trying to provoke fixtures before the market drops further.









After several days of decline the Pacific Handysize/Handymax market took a pause. Spot vessels which at the beginning of the week were plentiful eventually got fixed mainly on coal cargoes from Australia or Indonesia. This being said, backhaul cargoes are still in demand at discount rates. By the same token owners are reluctant to send their ships eastbound and are able to command premiums. The obvious consequence is now an Atlantic market that is slowing down and one can imagine that the differential between the two basins will gradually disappear.

Source: Barry Rogliano Salles, Shipbrokers, Paris

Published under Cement News